Retail Retold

Technology takes the old-world concept of one-to-one-relationship selling and makes it new

A salesperson and I are standing at the cash wrap in one of my men's clothing stores, examining a customer's purchasing history on a computer that doubles as a cash register. We carefully read the flowchart of the customer's purchasing behavior: he's bought three suits in the past year, spent more than $2,000 to date, and shopped four times in the past six months. Then we calculate the average number of times he shops in a year. That determines when the customer is likely to shop next. Should be soon, we both agree.

Next we look at the comments attached to the flowchart: The customer likes double-breasted suits and looks his best in blue or gray. He favors Perry Ellis and Christian Dior suits, has one shoulder slightly lower than the other, and on his last trip to the store mentioned that he wants to buy a new suit before his wedding anniversary. Not so amazingly, we both look up to see the customer in the store at that very moment -- looking at suits! The salesperson leaves my side and walks into the suit department to greet his customer personally, enthusiastically, knowledgeably. Armed with the information we've just reviewed, he is able to complete the sale -- a new suit, a shirt, a tie, and suspenders -- in under 15 minutes. The customer raves about how fast and easy we've made his shopping experience.

That story may sound like retail dreamland, but it's not. It can actually happen -- but only in retail organizations that have bought into one-to-one-relationship marketing and selling, which require a well-maintained database in addition to a willingness to serve each customer better. By providing up-to-date information about individual shoppers' buying habits and preferences, the computer enables retailers and salespeople both to improve productivity and to boost customer satisfaction tremendously. Here are more examples from our experience at Silverman's, a men's-apparel chain in North and South Dakota, of how one-to-one-relationship selling can make a good sales team sensational and satisfied customers thrilled.

In the midst of the Christmas rush, a frazzled customer comes into the store, hoping to complete her gift shopping. "Do you know John Doe?" she asks. "What does he like? What size does he wear? Help!" From a computer terminal on the sales floor, her salesperson confidently checks John Doe's file. Doe wears size extra-large tall, looks best in Gant rugby shirts and Levi dockers (items he looked at recently but didn't buy), works as a lawyer, and plays golf. "No problem," the salesperson says. "I can take care of this gift for you. Sit down and have a cup of coffee." A few minutes later the relieved customer leaves the store with John Doe's wrapped gift -- a rugby shirt and a pair of dockers.

Two weeks after a big sale, a salesperson looks in his mailbox and finds a self-generated computer report reminding him to call a customer to make sure everything is satisfactory. "Not exactly," the customer says. "The sleeves on the coat are too long." Knowing that most customers would rather stop shopping at a store than take the trouble to complain, the salesperson insists that the customer bring the coat back for alterations. A customer is saved, along with the tremendous potential for his future purchases -- by some estimates, more than $200,000 over a lifetime.

The marketing department produces a simple postcard announcing the arrival of lush bathrobes manufactured by a prominent designer. The computer is programmed to select only those customers who have previously purchased the designer's merchandise. The marketing staff further narrows the list to include only those customers who have not purchased bathrobes in the past year and would be likely to shop now. The mailing elicits a 25% response rate in four weeks -- with no discount.

The store's general-merchandise manager is on a buying trip when a vendor pitches him a line of expensive sweaters. He tells the vendor, "Before I commit, let me see if I can sell this merchandise." He calls an assistant buyer back at the office, who generates a computer report listing all the customers who have purchased upscale sportswear in the past and are likely customers -- based on their hobbies, income levels, and occupations -- for the new line. Several sales- people help narrow the list to just 48 potential buyers. The general-merchandise manager purchases 48 of the new sweaters in just the right sizes. He then makes sure each customer's file is coded so the customer will be contacted when the new sweaters arrive.

One-to-one-relationship selling is not new -- it's been practiced for decades. Don Peppers and Martha Rogers brought it into the 1990s with their book, The One to OneFuture: Building Relationships One Customer at a Time (Currency/Doubleday, 1993). Gone are the days when a trip to the mall was entertainment, they write. In busy two-income households, shopping has become drudgery. One-to-one-relationship marketing and selling can eliminate the pain and frustration of shopping by minimizing the time it takes customers to get what they want.

Do customers want stores to collect such intimate information? If you polled them, most would say no without thinking. "We value our privacy," they'd say. "Our mailboxes are already too full of junk mail." But when customers are given this kind of careful attention, they respond enthusiastically. In our impersonal society, being greeted by a professional who truly knows and understands your individual needs is not only a pleasure, it's a relief. It recalls the small communities of the past, where you were welcomed by name in every store.

The average purchase in most retail apparel stores is just $50. Most customers receive little service; they may find the right shirt, but no one helps them find matching slacks. Frustrated, they'll wander to the next store. Since we instituted one-to-one-relationship selling at Silverman's, the average sale at our three stores has increased by 80%. For those transactions that directly involve one-to-one techniques, the average sale has tripled. And the approach has locked in customers' loyalty.

On the expense side, one-to-one-relationship selling focuses our marketing. Instead of spending 2% to 4% of sales on advertising in the mass media, which has low response rates, we spend a very small amount on focused contacts for far better results. A simple mailer to 180 customers recently generated more than $16,000 in sales; it cost just $125 to produce and mail, using common desktop-publishing software. The average response rate to such mailers is 25%, and response has run as high as 40%. The highest percentages are achieved when the salespeople jot a handwritten note on the mailer -- "Hope to see you!" or "I thought you'd like to know about this!" -- or follow up with a phone call.

For one-to-one-relationship marketing and selling to work, however, owners and managers must make a wholehearted commitment to them. Owners must be willing to invest in the necessary hardware and software, and to spend the time with managers and staff to teach them how to use and regularly update the databases. Sales managers must thoroughly understand the concept of relating to customers as individuals rather than as a faceless mass. They need to learn what information to gather; how to gather, store, and retrieve it; and when to do what. Finally, they must be able to train, encourage, nudge, and cajole skeptical salespeople, who'd rather do business the lazy way.

The payoff for employees comes not only when their personal sales (and hence their raises and bonuses) improve but also when customers start asking for them by name. The fear of "May I help you?" rejection disappears, and selling is no longer an exchange of goods for cash or credit but an event between two people who feel more like friends than like strangers.

There are several software programs on the market that can manage the information needed for one-to-one-relationship marketing and selling. It's important to use software that can capture every detail of a customer's purchase and also record a large variety of information about the customer, including occupation, significant dates such as birthdays and anniversaries, and sizes. The software should prompt salespeople to collect all that information and should allow them to enter and retrieve it quickly at the point of sale. Such software programs include Softwear/P.O.S., made by Infocorp Computer Solutions Ltd., in Winnipeg, Man., Canada, and STS Retail System, made by STS Systems Inc., in Montreal, Que.

Of course, no matter how sophisticated the software, it won't do the whole job. Your marketing and administrative staffs will probably need to manipulate the computer's reports to get exactly the information you need to match your specific products or services to the customers who already know your business.

Our experience with building one-to-one relationships has taught us three things: business can be great, customers can be wonderful, and salespeople can be smarter and more responsive than the industry thinks. At Silverman's we're enjoying higher individual sales, more confident staff, and customers who buy more, more often. One-to-one-relationship selling and marketing represent technology used to its ultimate potential -- to make human connections where few have existed before.

* * *

A third-generation clothier, Stephen M. Silverman (ndgt83a@prodigy.com) applies today's technology to the philosophy of selling he inherited from his father and grandfather.